431-00128 (Agriculture)

The Cannabis Act (the Act) is designed to better protect the health and safety of Canadians, to keep cannabis out of the hands of youth, and to keep profits from illicit cannabis sales out of the pockets of criminals and organized crime. All holders of a federal cannabis licence must comply with the provisions of the Act and the Cannabis Regulations (the regulations)which provide the federal legal framework that controls the production and sale of cannabis. Health Canada works closely with the provinces and territories, Indigenous communities, the regulated industry, public health organizations, and law enforcement to support effective implementation of the regulations.

Under the Act and its regulations, a federal licence is required to cultivate cannabis (as well as other authorized activities, such as processing cannabis or selling cannabis to other federal licence holders or to provincially or territorially authorized distributors and retailers). The grounds on which the Minister may refuse to issue a licence are outlined within subsection 62(7) of the Act and aim to ensure that those who receive a licence are capable of conducting their activities in a safe and responsible manner in compliance with the Act and its regulations.

The cultivation and processing of cannabis in Canada is subject to stringent requirements and applicants who wish to become authorized producers must undergo an in depth security clearance process. All licence holders, agents, corporate directors and any individuals occupying senior positions at the site must hold a valid security clearance. This involves a criminal record check and law enforcement record check to detect any known links to organized crime.  

Furthermore, the national Cannabis Tracking System is a federal enforcement tool in place to track the flow of cannabis as a means of preventing the illegal inversion and diversion of cannabis into and out of the regulated framework. Reporting requirements, in accordance with the regulations, are also in place to help prevent diversion into the illegal market.

In addition, the regulations specify physical security requirements for the perimeter of a production site as well as for areas within the site where cannabis is present. For example, applicants for standard cultivation or processing licences must put systems in place to ensure that access to these areas is controlled at all times, and establish 24/7 visual monitoring systems to detect unlawful conduct. Areas where cannabis is present must be secured by an intrusion detection system that will detect attempted or actual unauthorized access to the area, and a record must be made of every person entering or exiting those areas.

Under the regulations, all applicants must notify local authorities (including local government, fire authority and police force) prior to submitting their application to Health Canada. This process allows municipal officials an opportunity to exercise their authorities. On May 8, 2019, Health Canada introduced changes to align the approach to cannabis licensing with the approach for other regulated sectors, such as pharmaceuticals. With these changes, all new applicants for licences to cultivate cannabis, process cannabis, or sell cannabis for medical and non-medical purposes must have a fully built site that meets all the requirements of the regulations at the time of their application, as well as satisfying other application criteria. This means that applicants would need to comply with municipal bylaws and zoning requirements before submitting their application to Health Canada.

With respect to environmental concerns, outdoor cultivation is considered a less energy-intensive method of cultivation, resulting in less energy use and a reduced carbon footprint. In addition, any methods used by a licence holder to destroy cannabis must comply with all applicable federal, provincial and municipal environmental protection legislation.

All applicants are responsible to comply with all applicable provincial or territorial laws and regulations (e.g., environmental laws) as well as municipal by-laws (e.g., zoning and building permits). Health Canada encourages all provinces/territories and municipalities to use the tools at their disposal to ensure that prospective cannabis licence holders meet all standards and bylaws, including local by-laws about zoning, noise, and odour. One potential reference is the Municipal Guide to Cannabis Legalization developed by the Federation of Canadian Municipalities, which provides guidance in a number of areas, including land use management and bylaw enforcement.

The Cannabis Act requires that a legislative review be conducted three years following its coming into force.